Question: Defender: Current trade-in (re-sale) value = $7,000, decreasing at an annual rate of 50% from the previous years value O&M = $2,000 in year 1,

Defender:

  • Current trade-in (re-sale) value = $7,000, decreasing at an annual rate of 50% from the previous years value
  • O&M = $2,000 in year 1, increasing by $2000 per year
  • Immediate overhaul required (if kept) = $500
  • Maximum possible lifespan is 5 additional years of service (from now)

Find the AEC at the ESL. Assume MARR = 11%

a) 6648 - 6688

b) None of the other answers

c) 6555 6595

d) 6478 6518

e) 6805 6845

f) 6274 6314

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